YENI MUSAVAT,
31, January 2008

The information and resource centre on Azerbaijan's oil industry has said that the country's foreign debt has reached 2.272bn dollars, the opposition newspaper Yeni Musavat reported on 31 January.

The newspaper quoted the centre as saying that this figure is 15.2 per cent higher than in 2007. The report added that the country's foreign debt per capita totalled 264.2 dollars.

"The centre quoted the Finance Ministry as saying that 371.4m dollars of foreign debt relate to loans received for economic reforms, while 1.9bn dollars relate to investment projects. That is, although the government is receiving large sums in petrodollars, it continues to increase the amount of its foreign debts," Yeni Musavat said.

Commenting on the centre's figure that per capita foreign debt in Azerbaijan stood at 224 dollars in early 2007, the paper said that "in this period the price of Azerbaijani oil in world markets reached fantastic levels and the profits that were taken were twice what was predicted... It transpires that the authorities do not intend to keep petrodollars for the future generation, but, on the contrary, plan to accumulate a fantastic amount of debt for the future generations".

The paper added that the loans received from foreign donors as part of "investment projects" are channelled into the financing of infrastructure projects "which smell of corruption".

"For instance, 429.5m dollars were spent on road construction. It is interesting that... about 1bn dollars were allocated from the state budget to the transport sector this year. The strangest thing is that the oil and gas sector, which is rolling in dollars, benefited from loans. A total of 150m dollars in loans was channelled into the oil and gas sector," Yeni Musavat said.

According to the paper, it is impossible to explain this paradox.

In an interview with the paper, economic expert Qubad Ibadoglu said that from a strategic standpoint an increase in Azerbaijan's foreign debts was damaging.

"We should think how we will return this money after the oil finishes," Ibadoglu said. He opposed receiving loans for various projects if "transparency and effectiveness are not ensured".

Opposition MP Panah Huseyn said that the loans received are sometimes not being spent as intended.

"If the GDP has increased at the rate stated by this government, then the country's indebtedness should be restricted," Huseyn said.

He added that "the majority of foreign banks issue loans for Azerbaijan, an oil country, with guarantees [to repay the loans]. Sometimes they issue loans without checking standards, some even get into corrupt contacts, issuing loans enthusiastically".